Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Biotech / Medical : XOMA. Bull or Bear? -- Ignore unavailable to you. Want to Upgrade?

To: Robert K. who wrote (7095)	9/1/1998 12:33:00 AM
From: aknahow	Read Replies (1) \| Respond to of 17367

Bob, it does not matter what shareholders want. It is not even a case of management screwing anyone. XOMA did not sell out the last time because there was no bid on the table. Poison pills don't work well for the following reason. The board is responsible to evaluate even hostile offers. If ABC offers $4 tomorrow that is a 100% premium. Management and the board can try to justify that is unfair but all new buyers at $2 plus are going to say it's a great offer. Those that don't want it are not going to buy the stock but once there is an offer the arbitrage crowd and new comers will pile on and threaten to sue the board if they do not accept what appears and will appear to any judge as a fair offer. As I said in the case of Calgene, if you think the company is a steal buy the stock. Same thing was true with Somatagen. Everyone complained but they already held all they wanted and newcomers were delighted to buy and sell out to Baxter. (Decision was made by management but they had no choice.) I do think the questions asked were for some other companies benefit. We all feel terrible but unless the stock moves up the buyout premium is not apt to be more than 60% above the market price if and when an offer is made. Sucks but not managements fault. With the price this low the company is vunerable. They have cash of close to $40 million, and a P III about to end in a month or three. The pain in the general market will convince many that just getting out at a premium to market was better than the loss of even more of their equity. Ths is what I believe is going on. This is opinion only. I do not know of any offer. My post is intended to indicate how things might develop should there be one.